Carmello and Leslie (ages 34 and 35, respectively) are married and want to contribute to a Roth IRA. In 2019, their AGI totaled $42,000 before any IRA-related transactions. Of the $42,000, Carmello earned $35,000 and Leslie earned $7,000. How much can each spouse contribute to a Roth IRA if they file jointly? How much can each spouse contribute to a Roth IRA if they file separately?
What will be an ideal response?
If they file jointly, each spouse can contribute $6,000. If they file separately, Carmello cannot contribute to a Roth IRA and Leslie can contribute $1,800.
If the couple files jointly, Carmello and Leslie can each contribute $6,000 to Roth IRAs because their MAGI is below the beginning of the phase-out range ($193,000). However, if they file separately, contributions are phased out for MAGI between $0 and $10,000. Because Carmello's MAGI exceeds $10,000 he is not allowed to contribute. Because Leslie's MAGI is 70 percent of the way through the phase-out range, she must phase out or reduce the $6,000 contribution by 70 percent. Consequently, she is allowed to contribute $1,800 ($6,000 ? (70% × 6,000)).
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